1.) Isn't there an update tool from Asus that you can use to automatically flash the BIOS? I used a program downloaded from Asus that did it all for me, and my comp just rebooted in the end and was back and running, no problems.

2.) They usually all reset, yes.

3.) It is not compulsory to keep your PC running, since if everything is working fine for you, then you don't have to update your BIOS. But generally, check out the change notes and you can make your decision whether you feel the update is necessary or not.